In a stunning rejection of Mattel’s long-running claims against MGA, the jury found that MGA had proven that Mattel acted willfully and maliciously in misappropriating trade secrets from the smaller company.

MGA attorney Annette Hurst said the judge would have discretion to as much as triple the damages.

The jury found that Mattel does not own the idea for the popular Bratz line or any of the sketches that led to the multi-ethnic dolls with oversized heads and feet, large eyes and lips, and small bodies.

Further verdicts were expected later in the day as the complex, 28-page decision was read in US District Court.

Hundreds of millions of dollars in potential damages and the rights to a blockbuster toy were at stake in the case that has dragged on since 2004 and cost both sides millions of dollars in legal fees.

Despite the verdict, Larian questioned whether Bratz dolls would be able to make a comeback in the aftermath of the suit.

“Mattel killed the Bratz brand. It is never going to be the same level as it was before,” he said.

The panel found that MGA did not steal any trade secrets. But the panel did not follow instructions to then move on to another section of the verdict form, and instead listed items that were Mattel trade secrets. Judge David O. Carter indicated he would address that later in the session.

A jury awarded Mattel $100 million in 2008 and found that Carter Bryant had developed the Bratz concept while with Mattel, but the verdict was overturned last year.

In the appellate ruling, the court said some of the trial judge’s decisions didn’t take into account MGA’s sweat equity in developing and expanding the Bratz line from Bryant’s original ideas. Other than damages, a key issue in the retrial was how to interpret the language of an invention agreement that Bryant signed with Mattel in 1999.

MGA’s CEO has said his company spent at least $150 million on legal fees in the legal fight and was forced to lay off 300 employees as a result of the litigation.